Nightclubs struggling as funding dries up
The turnover of UK nightclubs has fallen another five per cent in the past year as they struggle to compete with the growing number of late night bars and clubs, says Ortus Secured Finance, the commercial lender.
Ortus Secured Finance says this in now the fourth successive year of falling income in the sector, as the Top 100 nightclub businesses in the UK registered £325m in turnover, down from £340m in 2015/16, and £428m in 2013/14.
The commercial lender explains that late-night bars and pubs, which have become much more common since the Licensing Act came into force in 2005, are taking an ever-bigger bite out of nightclubs’ market share. In many cases these bars are able to open as late as nightclubs, having been restricted to 11pm under previous rules.
Many nightclubs, already struggling to compete with this new breed of bars, are also finding it more and more difficult to access the finance they need to overhaul their premises and grow their clientele, adds Ortus Secured Finance.
Traditional lenders are still shy of lending to the sector following the recession, after which many have deemed the sector to be too risky. This has given alternative lenders like Ortus a critical role in funding nightclubs in the UK.
Jon Salisbury, Managing Director of Ortus Secured Finance, says: “The decline of the nightclub sector shows no signs of ending, and that’s hugely worrying for a key part of Britain’s night-time economy.”